Gross domestic product grew 6.3 percent in July-September, its fastest pace in three quarters, the data showed.
"In a normal year, businesses are conversant with the tax processes, and so know their tax liability, so the collections are usually in line with what is anticipated", TCA Anant, Chief Statistician of India and Secretary to the Ministry of Statistics and Programme Implementation, said on Thursday. In the fourth quarter of 2013-14, economy had grown at 4.6 per cent.
"Manufacturing growth has been one of the main reasons for the encouraging growth rate figure of 6.3 per cent for 2nd Quarter", he added.
"It is likely that when revised estimates are prepared, indirect tax collections for this period may actually be higher than what we have reported", Anant said at a press conference while admitting that the GST introduced a "certain level of statistical challenge" in compiling the growth numbers. But we can not say now whether this will mark an upward trend in the growth rate.
The FM further said, "the rate of growth of gross fixed capital formation has also increased from 1.6 percent in the first quarter to 4.7 percent in the second quarter". Coming close on the heels of Moody's recent upgrade of India's sovereign credit for the first time in almost 14 years, the growth buoyancy is a shot in the arm for the Modi government, which has been fighting off charges that demonetisation and GST launch disrupted the $2.4-trillion economy. Prominent Indian firms had their best profit growth in last six quarters in July-September, according to Thomson Reuters data.
"Robust growth of 7.6 percent in electricity and other utilities, and 9.9 percent in trade, transportation and communications also powered this acceleration", the FM said, adding "Overall, the services sector recorded a growth of 7.1 percent in the second quarter".
While manufacturing grew 7 per cent in the second quarter against 1.2 per cent in the first, services sector growth showed a significant decline to 7.1 per cent from 8.7 in the previous quarter on account of the muted performance of financial, insurance and real estate sectors.